-
The National Association of Realtors® (NAR) settled a major lawsuit in March. It’s still too early to tell exactly how real estate will be affected, since the courts have yet to approve the settlement, but we’ll shed some light on what’s happening.
-
Mortgage rates fell slightly in March, closing the month at 6.79%. The Fed continued its wait-and-see approach to rate cuts during the March meeting, holding the federal funds rate steady and stating that they need more data indicating that the economy is continuing to improve.
-
Sales increased 9.5% month over month, and inventory rose 5.9%. More homes are coming to the market and quickly translating to more sales. New listings rose by 15% month over month, which only benefits the market.
The National Association of Realtors® (NAR) reached a $418 million settlement in an antitrust lawsuit on March 15, 2024, addressing concerns about inflated commission rates and lack of transparency in buyer's agent compensation. As part of the settlement, buyer's agent compensation cannot be advertised on Realtor®-owned Multiple Listing Services (MLS), promoting greater transparency in the industry. Additionally, buyers will now be required to sign buyer's agency agreements to ensure understanding of the buyer-broker relationship and compensation. While the impact of these changes on the housing market remains uncertain, current trends indicate a heating market, with expectations of rate reductions by the Federal Reserve after the June or July meetings. Despite regional variations, the market anticipates more transactions and a healthier environment for buyers and sellers. Our team remains vigilant in monitoring market dynamics to provide informed guidance for your real estate endeavors.
BIG STORY DATA
THE LOCAL LOWDOWN
-
Median home prices are slightly below peak levels across the Bay Area. As more new listings come to market, we expect prices to continue rising and to reach new highs in the second quarter.
-
Active listings, sales, and new listings rose month over month, which are all beneficial for the housing market. We expect inventory to increase in the first half of the year, and possibly return to a more normal market, after the slowdown experienced over the past year and a half.
-
Months of Supply Inventory declined in Q1 2024, indicating that buyer competition is ramping up. MSI implies a sellers’ market in most of the Bay Area.
SINGLE-FAMILY HOME AND CONDO INVENTORY, SALES, AND NEW LISTINGS INCREASED MONTH OVER MONTH
Since the start of 2023, single-family home inventory has followed fairly typical seasonal trends, but at significantly depressed levels. Low inventory and fewer new listings have slowed the market considerably. Typically, inventory peaks in July or August and declines through December or January, but the lack of new listings prevented meaningful inventory growth. New listings have been exceptionally low, so the little inventory growth in 2023 was driven by softening demand. In December 2024, inventory and sales dropped. However, more new listings came to the market in 2024, which has driven the significant increase in sales in Q1 2024. The market is already looking healthier, and we expect more new listings and sales in Q2 2024.
With the current low inventory levels, the number of new listings coming to market is a significant predictor of sales. New listings rose month over month, as did sales, increasing significantly in the Bay Area. The next three months will be critical to our understanding of the market. More supply will mean a healthier market and a more normal housing market in 2024.
MONTHS OF SUPPLY INVENTORY IN MARCH 2024 INDICATED A SELLERS’ MARKET
- Months of Supply Inventory (MSI) gauges supply/demand balance by calculating how long it would take to sell all listed homes at current sales rates.
- A balanced market in California typically has an MSI around three months.
- An MSI below three signifies a sellers' market, while above three indicates a buyers' market.
- Bay Area markets predominantly favor sellers, with low MSIs reflecting strong demand.
- San Francisco's MSI fluctuated between buyers' and sellers' markets over the past year.
- Currently, all Bay Area counties except Napa have MSIs below three months for single-family homes (sellers' market).
- Condos in Monterey and San Francisco, along with single-family homes in Napa, are balanced.
- The percent of list price received varies seasonally, with winter months seeing lower percentages due to reduced demand.
- Q1 2024 saw higher sale price to list price ratios (SP/LP) across the Bay Area compared to last year, indicating sellers can expect to receive a higher percentage of list price in 2024 compared to 2023.
